Amkor takes broad aim at fast-paced packaging market

Ask John Boruch to name the most popular chip packages today, and he's likely to ask you how much time you have. As president of Amkor Technology Inc., the world's largest contract semiconductor packaging company, Boruch has seen the packaging end of the business evolve from a simple, final step in the semiconductor supply chain, into an increasingly complex process that involves more than 1,000 different packages.

This explosive growth has left OEMs with a complex array of choices, creating some concern that chip makers are less prepared to tackle the packaging revolution than they had been the changes in wafer fabrication.

"It's an even bigger problem for their chip suppliers, who must invest in ever more costly infrastructure to make any
of these multitudinous package types," Boruch said.

To be sure, Boruch has a vested interest in espousing the benefits of outsourcing chip packaging, just as executives from the major foundries discuss wafer contracting. But in a wide-ranging interview with EBN, Boruch, who is based in Chandler, Ariz., touched on many key issues that are on the minds of both chip makers and their OEM customers, issues that are likely to become more pronounced if chip demand outstrips supply in coming months, as some analysts have predicted.

Leading-edge packages, including micro-BGA, flex-BGA, super-BGA, flip-chip, and other chip-scale packages, are extremely sophisticated and complex; chip makers that don't invest in the early production stages of these radical new packages will be forced to outsource this assembly to contract businesses such as Amkor, according to Boruch.

"More than 80% of our work is now with leading-edge packages," compared with just 20% a few years ago, he added.
This shift to outsourcing could allow OEMs to get faster delivery, at a lower cost, of any new advanced package chip they need. "It's a similar cost-effective solution as foundries play on front-end processing. And like foundries, we are going to become a much larger part of the semiconductor production market," Boruch said.

Indeed, Boruch has set some lofty goals for West Chester, Pa.-based Amkor, which already has a 33% share of the global chip-assembly market. The company generated $450 million in revenue in the second quarter, up 16.9% from the same period last year, while net income fell to $11.5 million from $20.8 million.

In reporting the company's financial results recently, Boruch said the second quarter "marked a turning point in the cycle and represents a springboard for what we expect will be sharply improved performance in the second half of the year.

That's the short-term view. Boruch's long-term goal is to build the company's market share to 50% in five years, and he's counting on increased demand for advanced packaging. To fuel the growth, Amkor is doubling its capital investment this year, to $200 million, and that figure could grow to $300 million in 2000, Boruch said.

The company's business reflects the broad-based semiconductor market. A quarter of its packaged chips end up in the hands of PC OEMs, another 25% to telecom OEMs, 15% to consumer electronics product makers, 10% to handheld computer makers, 6% in the automotive market, and the remainder spread over the web and woof of industry.

Most of Amkor's packaging work involves logic, microprocessor and microcontroller, mixed-signal, and graphics chips, and few memory chips.

"Although memory chips can be very dense, their singular design makes them easier for IDMs [integrated device manufacturers] to package," Boruch said. "Although DRAM producers are turning more often to foundries, they can still do the packaging cost-effectively themselves."

The complexity and widely varying designs of logic chips makes contract assembly an attractive option, especially with die shrinks and lightning-speed performance, according to Boruch.

Here is a quick look at some of the more complex packaging areas in which Amkor is involved:

A multichip "system-in-a-package" has been launched as an interim step toward monolithic system-on-a-chip ICs. Instead of embedding different core functions on a single chip, Amkor assembles separate active-function chips, along with 20 to 30 passive components, in a single BGA package as small as 22 mm ?? 22 mm. "A customer can have the same form-fit package as an SOC without long design cycle and costly production," Boruch said. "SOC is still extremely difficult because you're trying to put functions on a single chip that require entirely different fabrication processes."
Amkor has established the Micromodule Business Unit at its Chandler development center to spur the new multichip packaging market.

Dozens of different BGA-type packages are now mainstream products. Amkor's assembly plants in the Philippines and in Korea, as well as three assembly operations at Amkor's Korean subsidiary, are equipped to handle the heavy demand mix.

Given the huge investments required for BGA packaging, most chip makers are equipped to handle just one or two types, Boruch said, adding that this could severely limit the BGA packaging options for OEM customers.

The flip-chip packaging technique, long hailed as "the next-generation package of tomorrow," is starting to attract attention on the development front. "The time is almost here that many high-speed applications are going to require flip-chip assembly to get needed performance levels," Boruch said.

Amkor is setting up a flip-chip production line at its most advanced plant in the Philippines. The contract assembler is also developing its own process to put contact bumps on the flip-chip die. Until now, Amkor has used Chandler-based Flip Chip Technology to bump die for flip-chip packaging.